Canadian Pacific has revised its takeover bid for Norfolk Southern, saying that it should ease fears that the railroad deal would be shot down by regulators.
The new offer is valued at $91.62 per share and includes $32.86 in cash per share and a fixed exchange ratio of 0.451 shares in the combined company.
The prior offer, which had a value of $92.06 per share, included more cash but fewer shares in the new railroad.
Norfolk Southern Corp. rejected the initial bid, saying it was grossly inadequate and had regulatory risks. It said Tuesday that the new offer was more uncertain and risky, in part because there was less cash consideration.
The company also says that the revised proposal from Canadian Pacific Railway Ltd. is worth less than what its board had initially found inadequate.
Federal regulators haven't approved any major railroad mergers in more than 15 years. One of the only major deals in recent years is when Warren Buffett's Berkshire Hathaway conglomerate bought BNSF railroad in 2010.
Shares of Norfolk Southern, based in Norfolk, Virginia, shed $2.51, or 2.7 percent, to $89.01 in premarket trading about an hour before the market open.